Japan's Balance of Payments Statistics for 2015 and International Investment Position at Year-End 2015
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International Department: Bank of Japan
No 16-08-15, Bank of Japan Research Papers from Bank of Japan
This report presents developments in Japan's balance of payments (BOP) for 2015 and Japan's international investment position (IIP) at year-end 2015. The sum of the balances of the current and capital accounts in the BOP, i.e., the net surplus or deficit, represents Japan's net lending to or net borrowing from the rest of the world. This is conceptually equal to the net balance of the financial account, which records transactions in external financial assets and liabilities. Changes in the IIP are attributable not only to such financial transactions but also to market developments including those in exchange rates, interest rates, and stock prices. The following is an overview of the current and financial accounts for 2015 and the IIP at year-end 2015 bearing these points in mind. First, the current account surplus increased for the first time in five years, mainly due to a significant decrease in the deficit on goods. Other factors contributing to the increase in the current account surplus are (1) a decrease in the deficit on services, mainly reflecting an increase in the number of foreign visitors to Japan, and (2) an increase in the surplus on primary income such as portfolio investment income, mainly reflecting an increase in Japanese-owned assets abroad. Second, with the surplus in the current account increasing, net lending in the financial account also expanded. The increase in net lending in the financial account was mainly due to increases in net purchases of foreign securities by Japanese institutional investors and in net acquisitions of foreign direct investment assets by Japanese companies. And third, net assets decreased for the first time in five years, mainly because the value of Japan's external liabilities increased reflecting the rise in Japanese equity prices. This report consists of four sections. Sections 2 and 3 cover the current account and financial account, respectively, outlining the trends in these accounts and then describing developments in each account by main component. Next, Section 4 presents an overview of the IIP, explains the changes by factor while taking into account developments in the financial account, and describes changes by component. In addition, this report presents, in several boxes, notable features of recent developments in the BOP and IIP as well as some topics data users frequently inquire about.
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